Tomorrow, October 30, the South Dakota legislatures Government Operations & Audit Committee (GOAC) will meet at 9 am in Pierre. I’ve done a post looking very briefly at all agenda items but one. That one agenda item is the audit that was performed of certain areas of the Secretary of State (SOS) office. This post will look at that agenda item.
Before I continue this post I want to say two things. First, I hoped to never have to mention former Secretary of State Jason Gant on this blog again. And second, I’ve heard many say that all these “inconsistencies” that come up with Gant are a case of current SOS Shantel Krebs throwing Gant under the bus? I don’t see any of these as cases of Krebs throwing Gant under the bus; rather it is how transparency in government is supposed to work. If an elected official, or their office, does anything questionable or acts inept it should be discovered and brought to the public’s attention!
The GOAC meeting agenda item in question is number 8. It is the audit completed for “certain accounting records and processes at the Secretary of State’s Office at December 31, 2014”. The document can be viewed here. December 31, 2014, is important because it would have been the end of Gant’s last year in office (although he had actually been working from Sioux Falls for months at that time).
There were seven sections of the document. Here is a summary of what I found important from each section:
Section 1 – Inconsistencies with PAD account.
The SOS office has prepaid account deposit (PAD) accounts to receive money from entities that frequently use the offices services. The SOS office shows these PAD accounts have a balance of $289,287.47 as of Dec. 31, 2014. That amount should reconcile the cash balance in the local bank account and the PAD accounts reported on the states accounted system; those two together equal $254,970.63. That leaves a difference of $43,307.84. The audit notes there “was no evidence of reconciliation explaining the $43,307.84 difference”.
This definitely needs to be looked into further. Is this a case of Gant’s office once again being inept and failing to keep the books updated. Or is it a case of money going somewhere it shouldn’t…
Section 2 – Original State flag missing
This particular item has caused a bit of news. It was determined the original State flag was missing. The flag has been found by the AG’s office and criminal charges are forthcoming. Apparently a former SOS employee living in DC has the flag. Another case of the Gant office not living up to the standards expected by the public.
Section 3 – Missing iPad minis
Three of thirty iPad minis were found missing on January 2, 2015. Not only would I question why there are three missing iPad’s, but I would also question why the office needed that many. Although perhaps they are used to help County Auditors during election season. It would be interesting to hear what Gant has to say.
Section 4 – Adequate budget to finish FY2015, but there are unexpected items impacting the budget.
The audit found the SOS office has stayed within budget and is on track to do so at the end of FY2015. Yet there are three unexpected items which are having an impact on the SOS FY2015 budget:
- The 2013 legislative manual (Blue Book) that is normally printed every odd year was not available until December 2014 (a year and a half late). The Blue Book was not only published late, but a different publisher was chosen. That caused the 2013 Blue Book to fall in the FY2015 year, instead of FY2013 or FY2014. The blue book published was $16,360 for FY2015. Worse yet, the original publisher “filed a claim of $28,512.93 plus accrued interest in damages in April 2015.” Gant just keeps costing the state money. Not only did Gant’s office fall behind by a year and half publishing the Blue Book, it was done in a way that costs the taxpayers thousands of extra dollars. Additionally it placed an unexpected expense on the new SOS.
- An election history book was contracted during FY2014, with most of the cost occurring in FY2015. Actually when I go to the SOS office later this fall I want to see the election history book. I think it is an interesting topic for a book, but should that have been an undertaking of the SOS office?
- In 2014 Corporate documents were removed from online websites by the SD Bureau of Information Technology (BIT) because some documents had personally identifiable information. Redacting these documents and getting them back online in the proper fashion will take time and money from the SOS office. One more case where the Gant office should have been paying attention to what was going on.
Section 5 – Payroll is fine!
Good news! No exceptions were found in the operating and payroll expenditure transactions. Gant did good paying his bills and employees!
Section 6 – HAVA and FVAP issues
A review of the Help America Vote Act (HAVA) grant and the Electronic Absentee Systems for Elections – Federal Voting Assistance Program (FVAP) expenditures for the Gant years. It is not suprising to see HAVA have some issues with the Gant administration. Previously I‘ve blogged about how the Gant administration spent over half a million dollars to implement a system that is less functional than the existing hundred thousand dollar system.
Here are the inconsistencies found in this area for the Gant years:
- HAVA sub-grants were given out to SD counties totaling $110,495. The invoices for these sub-grants were not kept, so they could not be properly audited. That means it cannot be verified the sub-grant money was allocated according to the defined process.
- A cloud storage device was being paid for purely by HAVA grant funds even though the device was also used for Division of Business Services purposes. Any money used for Division of Business Services cannot utilize HAVA grant funds. This is an other area the Gant office failed to retain documentation, therefore it is not possible to show HAVA grant money is being spent properly.
- HAVA grant was also used to pay for oversight of the FVAP grant. The audit finds that use of HAVA funds is now allowable.
It almost appears at this time that the Gant office used the HAVA funds without actually understanding the restrictions tied to the grant. Actually this document even says the following:
The Secretary of State’s Office did not have adequate internal control policies or procedures with regards to HAVA and FVAP management.
That is just dealing with one small, but important, function when dealing with elections. How many other areas of the SOS office were left without internal control policies or procedures during the Gant years?
Section 7 – Remaining HAVA funds fine!
No exceptions were found for the remaining allocated balances of HAVA funds available to SD counties!